Deutsche Bank stays negative on Eutelsat
August 29, 2024
Deutsche Bank has trimmed its share price target slightly from €3.10 to €3 and says it is concerned by continued delays with OneWeb and in particular with repercussions following Eutelsat’s merger with low Earth satellite operator OneWeb. The bank maintains its ‘SELL’ advice to clients.
The bank says it believes that the satellite operator’s growth will continue to be penalised by delays accumulated by OneWeb, which should lead to no growth in 2025, a prospect the bank admits is disappointing.
Eutelsat’s current share price has suffered over the past week, falling from around €4.61 to €4.31 and a fall of 5.39 per cent on August 28th.
The bank’s report underscores the limited benefit OneWeb has had thus far and expresses concerns about Eutelsat’s leverage and backlog.
When the merger with OneWeb was announced, Eutelsat said it estimated OneWeb alone would generate revenues of between €150 million and €250 million in the 2023/2024 financial year, rising to €400 million in 2024/2025. Those forecasts have failed to materialise says the bank.
According to the bank’s calculations, OneWeb generated revenues of just €67 million in the past financial year, compared with €50 million a year earlier.
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